Apartments
Refinance & Acquisition without Substantial Rehabilitation
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Rockport Mortgage Corporation
is an FHA-approved Mortgagee and actively
provides financing utilizing the FHA insurance
programs nationwide.
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HUD
223(f)
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HUD
223(a)(7)
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Purpose
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Provides mortgage insurance
for existing apartment projects to facilitate
either the refinancing or purchase of projects
at least three years old.
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Provides
mortgage insurance in connection with the
refinance of projects currently
insured by FHA. Available for
profit motivated or non-profit borrowers.
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Eligible
Borrowers
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Profit motivated, non-profit
motivated and public owners are eligible.
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Maximum Term
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35 years
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May
not exceed the remaining term of the existing
mortgage, except in special cases where due
to the project feasibility, FHA may extend
the new term up to 12 years beyond the remaining
term of the original mortgage.
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Maximum Loan
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Refinance
The lesser of:
1) The amount that can
be supported by 85% of net operating income;
2) 85% of value; or
3) the greater of 80% of value
or 100% of the total cost of refinancing the
existing indebtedness.
Acquisition
The lesser of:
1) 85% of acquisition
cost (i.e., total cost to close);
2) 85% of value; or
3) the amount that can be
supported by 85% of stabilized net operating
income.
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The lesser of:
1) The original principal
amount of the existing insured mortgage.
2) The unpaid principle balance
of the existing insured mortgage plus the cost
of required Repairs, improvements, outstanding
debt incurred in connection with capital improvements,
prepayment penalties, and loan closing costs;
3)The amount that can be supported
by 90% of net operating income (95% if owner
is non-profit)
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Personal Liability
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None
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None
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Prepayment
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Negotiable
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FHA Application
Fees
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0.3% of the loan amount.
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0.3% of the loan amount. At
closing, HUD will approve reimbursement up
to one-half of the application fee.
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Mortgage Insurance
Premium
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1% for the first year (payable
at closing) and thereafter 0.45% of the outstanding
loan amount.
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.5%
of the outstanding loan amount.
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Repairs and
Replacements
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Funds for repairs, deferred
maintenance and capital improvements for
up to 15% of value or $6,500 per unit (may
be adjusted for high cost areas) can be included
in the loan amount, subject to the 85% loan
to value limitations.
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None.
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Finance
Fee
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Negotiable
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Negotiable
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Secondary
Financing
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Surplus cash notes are permitted,
up to 7.5% of the project's value.
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None.
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Funding
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Qualifies for government insured
mortgage-backed securities or direct Placement
or may be used to credit-enhance tax-exempt
bonds.
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Interest
Rate
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Subject to market conditions.
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Subject
to market conditions.
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Territory
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Nationwide.
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Nationwide.
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Additional
Parameters
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Properties at least three
years old (i.e. Certificates of Occupancy
outstanding for at least three years
on the date of application);
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A replacement reserve
deposit will be required at closing.
The deposit can be capitalized in the
mortgage loan;
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Per "MAP" (Multifamily
Accelerated Processing) Guidelines an
application can be processed in approximately
60 days from submission of a complete
package. It has been our experience that
several HUD offices are processing the
loans in less than 45 days.
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The Program is available
for fully insured mortgages or coinsured
mortgages that have been converted to
full insurance.
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Funds to cover repairs and
costs of the transaction can be included
in the mortgage loan. Outstanding debt
incurred in connection with capital improvements
already made to the property may also
be included in the mortgage loan, subject
to FHA approval.
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The term of the new mortgage
may not exceed the remaining term of
the existing mortgage though FHA may
extend the new term up to 12 years beyond
the remaining term of the original mortgage
if it is required for project feasibility.
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Loans insured under 223(a)(7)
assume program characteristics of the
underlying mortgage insurance program.
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Processing Section 223(a)(7)
applications usually takes 30-45 days.
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